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No, Millions of Americans Have NOT Dropped Out of the Labor Force Just Because They’re Retiring Baby Boomers

George Washington's picture




 

Zero Hedge notes that the number of Americans in the labor force has dropped to 1978 levels:

The civilian labor force … dropped from 155.3 million to 154.9 million, which means the labor participation rate just dropped to a fresh 35 year low, hitting levels not seen since 1978, at 62.8% down from 63.0%.

 

 

And the piece de resistance: Americans not in the labor force exploded higher by 535,000 to a new all time high 91.8 million.

Charles Hugh Smith shows the disturbing trend line:

The mainstream media portrays the cause of this crash as simply being retiring baby boomers, as shown by the following screenshots from a Google search:

But a February 26 report from the nonpartisan Economic Policy Institute shows this is false:

Since the start of the Great Recession over six years ago, labor force participation has dropped significantly. Most of the drop—roughly three-quarters—was due to the lack of job opportunities in the Great Recession and its aftermath.   There are now 5.8 million workers who are not in the labor force but who would be if job opportunities were strong.

 

***

 

More than 70 percent of the 5.8 million missing workers are under age 55. These missing workers under age 55—4.2 million of them—are extremely unlikely to have retired and are therefore likely to enter or reenter the labor force when job opportunities substantially improve.

 

***

The Washington Post noted in January:

The participation rate for workers between ages 25 and 54 fell sharply during the recession and still hasn’t recovered.

 

Obviously, retirements can’t explain this:

Credit: Calculated RiskCredit: Calculated Risk

So, what’s going on? One theory is that the weak job market is causing people to simply give up looking for work — they’re crumpling up their résumés and going home. An recent study from the Boston Fed suggested that these “non-inevitable dropouts” might even account for most of the decrease. Among other things, the authors noted that the labor-force decline has been far sharper for all age groups than simple demographics would predict.

 

***

 

So, why does the size of the labor force matter? If people are leaving the labor force for economic reasons (and they’re not going back to school), it would mean that the economy is in much worse shape than the official unemployment rate suggests. The jobless rate is officially 6.7 percent, but that only counts people who are actively seeking work — not labor-force dropouts. [Remember, you have to include labor-force dropouts in order to arrive at a useful unemployment number.]

In other words, the conventional explanation holds no water.

Despite all happy talk to the contrary, we have a “jobless recovery” – a permanent destruction of jobs – which is a redistribution of wealth from the little guy to the big boys. (And see this.)

No wonder Americans aren’t feeling the love.

And everything the government has been doing since 2008 has made unemployment much worse. And  here and here.

 

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Sun, 03/16/2014 - 11:39 | 4554867 AdvancingTime
AdvancingTime's picture

Much of this problem appears to be structural and caused by a lack of demand. This coupled with bad tax policies and government interference in the economy often favoring large businesses adds to the problem. This means that many of the unemployed become disheartened, while their skills become "rusty" and obsolete.

This often leads to  problems with debt, homelessness and they tend to fall into the vicious circle of poverty. This means that these individuals may not fit the job vacancies that are created when the economy eventually recovers. The article below looks into the harm it reeks.

http://brucewilds.blogspot.com/2013/01/unemployment-and-its-effect-on-cu...

 

Sun, 03/16/2014 - 10:11 | 4554601 dizzyfingers
dizzyfingers's picture
Fiscal Sustainability? Laurence Kotlikoff | Dec 12, 2013   http://mercatus.org/sites/default/files/Kotlikoff_FiscalSustainability_v2.pdf  

The table’s next to last row shows the absolute lifetime net tax payment facing those born next year under this scenario. The birthday present Uncle Sam will hand those born next year is a $420,600 net lifetime tax bill, which is $479,900 more than the net lifetime tax bill today’s newborn is facing under current policy. These figures indicate an absolutely massive imbalance in the implied treatment of those now

Mercatus Center at George Mason University

15

alive and our unborn children

if the entire fiscal gap is spread over everyone coming in the future in proportion to their earnings capacity; that is, the $420,600 would grow with labor productivity. Expecting future generations to pay vastly more than those now alive is not just generationally immoral, it’s also economically infeasible. It would require hitting up future generations for, on average, roughly 60 cents of every dollar they earn in taxes net of transfers received.

Table 3. 2013 US Generational Accounts

Age Lifetime net tax burden, in thousands of dollars 0 ?$59.2 5 ?$41.9 10 ?$26.6 15 ?$6.2 20 $14.7 25 $25.8 30 $12.4 35 ?$14.4 40 ?$49.4 45 ?$87.3 50 ?$138.1 55 ?$209.3 60 ?$282.9 65 ?$327.4 70 ?$302.3 75 ?$268.0 80 ?$236.3 85 ?$205.5 90 ?$166.5 95 ?$115.8 100 ?$30.3 Future generations $420.6 Difference between future generations and current newborns $479.9

Source: Calculations by the author and Giovanni Callegari.

 

Sun, 03/16/2014 - 09:52 | 4554562 Leraconteur
Leraconteur's picture

6-10 million left. The USA, most countries in fact, does not count those as expats in a special category unless they renounce and even then you have a mailing address for the IRS for 10 years.

This is also why 'there are no good men left' (in America). They split.

They WILL show up on a figure of those not working as they are simply not around to be counted as employed or getting a domestic W-2 or W-4 and thus cannot be counted as employed because they just are not there to be tallied. 

And so they go in with the 91.8 million.

Leave while you still can.

Sun, 03/16/2014 - 09:27 | 4554506 lakecity55
lakecity55's picture

I am considering going into business myself .

My two choices are

Liqour store robbery
Porta-John Shit-sucker tank truck driver.

Sun, 03/16/2014 - 03:01 | 4554122 are we there yet
are we there yet's picture

The trendline should adjust upward when Obama is out of office and we elect an american for president.

Sun, 03/16/2014 - 03:34 | 4554148 Kprime
Kprime's picture

I downed u because it has nothing to do with the ffkking idiot in the office. We are in the fourth turning.  Gov is stealing almost 80% of all production.  The direct tax rate, averaging 50%, does not represent the total theft.  Ask yourself how many times the growing, production, distribution and delivery of a simple loaf bread is taxed.  All before you work and pay out 50% of your income.  You then spend part of the remainder to buy a loaf of bread that has more taxes than flour.

Americans can add this shit up and they are seeing the truth.

Just past age 50, I quit.  no income, no bank, no cell phone, no mortgage, no car payment, no debt.  going on 4 years now.  After 50 years of being bled to death, I now work everyday to eliminate any efforts that produce an income for government.  I drove less than a 1000 miles last year, after spending 30 years driving about 60K per year.  I garden extensively, heat my house with wood I cut and split, get my water from a well, hang my clothes on a clothes line. I share with my community and help them all step away from contributing to gov.  Mind you, when I say "I", I am speaking of the household.  My wife hangs the clothes, lol, not me.  We aquire our farm fresh eggs down the road.  Our grass fed beef, all cuts from T bones, Club steak, roasts, top round, etc down to hundreds of lbs of prime ground, all less than 3.00 a lbs.  Those 1.5" Tbones grill up supremely.Think I will pluck a couple free range chickens this weekend.  Sorry .gov, you are not invited.

JOHN LENNON
Watching the Wheels
Album Double Fantasy released in 1980.

People say I'm crazy doing what I'm doing
Well they give me all kinds of warnings to save me from ruin
When I say that I'm o.k. well they look at me kind of strange
Surely you're not happy now you no longer play the game

People say I'm lazy dreaming my life away
Well they give me all kinds of advice designed to enlighten me
When I tell them that I'm doing fine watching shadows on the wall
Don't you miss the big time boy you're no longer on the ball

 I'm just sitting here watching the wheels go round and round
I really love to watch them roll
No longer riding on the merry-go-round
I just had to let it go

Ah, people asking questions lost in confusion
Well I tell them there's no problem, only solutions
Well they shake their heads and they look at me as if I've lost my mind
I tell them there's no hurry
I'm just sitting here doing time

I'm just sitting here watching the wheels go round and round
I really love to watch them roll
No longer riding on the merry-go-round
I just had to let it go
I just had to let it go
I just had to let it go

Sun, 03/16/2014 - 04:03 | 4554195 newworldorder
newworldorder's picture

You have implemented what works for your family. Eventually all of us who may survive the financial catastrophe will have to travel the same road. Those who believe that they will survive alone in their bunkers or cabins in the woods are vastly mistaken. Survival and rebuilding will belong to those who  have family they can join in rural communities.

Rural counties where farming is abundant, where you have ongoing family ties, and that will need the skills you can bring with you, may welcome you with open arms.

The rest will leave their bones on the concrete jungle.

 

Sun, 03/16/2014 - 00:10 | 4553950 kellycriterion
kellycriterion's picture

Some Old Lefty comments are missing. Surely they didn't retire from the field.

Forward the Lefty Brigade
Charge for the guns he said
Into the Valley Death
Rode the Lefty hundreds
Forward the Lefty Brigade
Was there a man dismayed?
Not tho the soldiers knew
Someone had blundered
Theirs not to reason why
Theirs not to make reply
Theirs but to do and die

Sun, 03/16/2014 - 03:23 | 4554143 dreadnaught
dreadnaught's picture

is your IQ above 75?

Sat, 03/15/2014 - 22:04 | 4553684 NOTfromSanFrancisco
NOTfromSanFrancisco's picture

 

 

It's not the retirees... It's the weather... I mean, it's Bush's fault...I mean, it's the Tea Party's fault... I mean, it's Israel's fault...Actually, it must be the old people retiring... Yeah, that's it... It's the retiree's fault!...

Sat, 03/15/2014 - 21:41 | 4553626 dexter_morgan
dexter_morgan's picture

The fucking media - one the biggest impediments to change for the better in this country. How have they all turned in to TPTB propagandists? Laziness? lack of intellectual curiosity? or just plain bought out?

Sun, 03/16/2014 - 00:26 | 4553975 Binko
Binko's picture

Mega Corporate ownership of virtually all media outlets + Corporate/Government merging of power and goals = All public media personalities become government shills.

Anybody who even remotely rocks the golden corporate/government boat that is enriching the well-connected class is instantly fired and ostracised. But more likely those with the slightest tendancy to rock the boat are never  hired in the first place.

Sun, 03/16/2014 - 07:52 | 4554371 Rafferty
Rafferty's picture

This is of course the explanation.  It's got a lot worse since Colin  Powell's corrupt son allowed mass mergers in the media.

Sat, 03/15/2014 - 22:52 | 4553781 jaxville
jaxville's picture

  You need to watch the video; Inside Job. It is about the financial sector and the fraud that led to the 2008 collapse. You may be perceptive enough to see that every last scumbag in that show has something in common. Perhaps that "common" trait extends to those who are behind the Western media?

 

 

Sun, 03/16/2014 - 07:56 | 4554374 Rafferty
Rafferty's picture

Do You Know Who they are?  (LoL)

Sat, 03/15/2014 - 21:49 | 4553645 zionhead101
zionhead101's picture

Well I spent 20+ years active in Politics back in the day's when I lived in the USA.

 

I saw first hand the revolving door.

Young kids out of college go work for a paper do favorable story's and eventually they become a candidate themselves or better yet they get GUBMINT job with gold plated pension.

No accident that MSM don't pay shit and has no pension.

So first of all you must understand that the ZIO- own the MSM, but feed them shit, the ZIO- own the gubmint and there with FREE-MONEY can hand out free gold-plated pensions to those who SUCK AIPAC COCK.

What else do you want to know?

Sat, 03/15/2014 - 19:08 | 4553135 hardmedicine
hardmedicine's picture

exactly. +1 The Wisp.... i miss Lynnbee...... your avi reminded me of her.... but back to topic.  With all the welfare benefits now you have to get a pretty good job to justify going off that...... no, there will be no collapse, just a slow continual rotting of our standard of living.  I have been awake for a long time.  The system will keep right on. 

Sat, 03/15/2014 - 19:01 | 4553111 foxmuldar
foxmuldar's picture

Im a Baby Boomer that's still in the work force. Why retire now when I can collect my Social Security, a pension from an earlier job I had for 28 years and a full paycheck each week. Finally Im making a decent wage. Im sure Im not the only one my age thats staying in the work force. As long as I have my health I don't see much reason to retire at least for another year or two. 

Not everyone has a hord of cash stashed away. I often see folks my age working part time jobs. Its the lazy folks collecting their welfare and extended unemployment checks along with their food stamps and their heating bills paid by us tax payers that are not looking for work. 

This week we saw a renewal to extend unemployment for another five months for those who's benefits ran out in December. My question is Why? Haven't they had a long enough time to sit on their duffs watching soap operas while the rest of us are working and paying into the system so they can continue to collect their freebees. 

Sat, 03/15/2014 - 21:55 | 4553657 zionhead101
zionhead101's picture

What are you doing selling donuts? Kmart? Walmart?

Everybody that I know that had a job, ... has lost his job, and can't find another one, in the high-tech industry when your over 50+ and not sucking GUBMINT cock, its impossible to find a job.

Sure you can go work at 7-11 and work as a clerk or janitor, ...

the problem with your narrative is that you confuse JOB, with profession.

The trouble is the professions are gone, ..

 

I myself was always an entrepreneur and always had my own companys, so NOBODY could fire me, but I always made a point every few years to send out resumes just to see if I could get a job, and the the response after 40+ was always FUCK_OFF,...

SHit I even  got so far a TELE interview with MS and google a few years ago, they asked questions like "how do you spend your day",.... I'm thinking do I say "18 hours/day programming", or do I tell the truth, play guiter and brew beer everyday:)

I have lots of friends in the States and now they're all pushing +60 an they can't find work, e.g. real work that they know and did all their lives. Nobody will touch them, cuz they over 35+

 

Sun, 03/16/2014 - 04:23 | 4554221 newworldorder
newworldorder's picture

You are correct. Professional positions have been decimated, especially for those aged 50 and over. If people only knew what goes on relative to hiring inside most HR Departments and Corporate Hiring Managers there would be a revolution. First off, there are not that many job openings, there is an overabundance of labor for most jobs and occupations and job creation, real job creation for jobs paying $50+ thousands per year are scarce. H1B Tech foreign applicants have flooded the high tech job market, low skill low education illegals have flooded the hourly and part time market. The MSM trots out Corporatist Economists and Statisticians to slice and dice meaningless and fudged numbers. Millions of job have been lost to technological innovation without an equal buildup in new job creation. Millions of jobs have been exported to the BRIC countries never to return to the US

As Americans, most of us are the most economically uninformed people on the planet. The 1% loves our stupidity and pays much money annually to keep it that way.

Sat, 03/15/2014 - 20:14 | 4553339 weburke
weburke's picture

that is an unrealistic view of the recentlly unemployed folks. who gives you this attitude? radio? 

Sat, 03/15/2014 - 22:45 | 4553768 RKDS
RKDS's picture

It's got to be the radio.  Where else can you hear the same angry uninformed message repeated 18 hours per day every day.

Sun, 03/16/2014 - 10:54 | 4554727 RKDS
RKDS's picture

Seriously, leave the radio on all day for a week.

My local talk radio only has three real programs during the workweek: its morning program, Beck, and Rush.  The local talker that follows Rush and Hannity just parrot Rush.  Rush has a weekend "best of" rerun, after which a semi-local talker and later Rusty Humphrey or Bill Cunningham all parrot him again.  Overnight they have that show for people who were abducted by aliens which is often a legitimate rerun.  We don't even get local politicals news because the local people are so hung up on Benghazi and gays lynching CEOs in Arizona.  Do you think this might be how people get the idea that Rush controls the Republican party?

Sat, 03/15/2014 - 18:36 | 4553030 moneybots
moneybots's picture

If the decline in people working was due to baby boomers retiring, The number of young people without jobs would be declining, as middle age people would be moving up and young people would be taking their jobs.  Also there would not have been numrous people on extended unemployment and numerous people obtaining disability benefits.

Something like 75% of jobs created last year, were part time.  Something is wrong with that picture.

Sat, 03/15/2014 - 19:04 | 4553124 foxmuldar
foxmuldar's picture

Welcome to the new work force. A part time world thanks to our idiot President and his Socialist policies. 

Sat, 03/15/2014 - 23:19 | 4553847 Setarcos
Setarcos's picture

FFS drop the Obomber socialist/commie/liberal/etc. nonsense

You and a myriad others got SO brainwashed and ill-educated over the decades that you use ridiculous labels, with not a clue as to their actual historical meanings.

In fact Obomber is the talking head for the fascist MIC and generally the private corporations - especially the banks - which own Washington DC.  In a socialist context the state would own the corporations instead of vice versa.

I'm not arguing which is ultimately better - especially because both are based in the premis of unlimitted growth on a finite planet - but discussion is impossible when terms are Orwellized to 'mean' the opposite, or nothing at all beyond inflammatory rhetoric.

Sat, 03/15/2014 - 16:10 | 4552591 The Wisp
The Wisp's picture

Did anyone ask John Gault why he is not workings at the RR any More, that would shed a Lot of Light on the Subject..

   why would you work your ass off when  everything you earn is Stolen.

Sat, 03/15/2014 - 15:48 | 4552535 q99x2
q99x2's picture

Why work when Yellen will pay your way.

Up my FAFSA Yellen M'Fr.

Sat, 03/15/2014 - 15:41 | 4552517 kellycriterion
kellycriterion's picture

Ok I lied, Old Leftyism is 80% dead.

Omniideopol is the future. If you want to rise in the OPM parasite food chain all ideologies, all philosophies, all religions, junk science, urban legends, in short anything that will stick against the wall must be in play.

And it's consistent with the established political strategies. Divide and conquer, bait and switch, false alternatives, shift blame, take credit, accuse others of what you do.

Old Lefties need to get more game or get leftied behind.

Sat, 03/15/2014 - 15:34 | 4552499 TheMerryPrankster
TheMerryPrankster's picture

illusions abound. Our leaders assure we are in recovery.  Days of bounty and grace surely await.

Only the mad terrorist stand in our way, the government must surveil, must search, and spy for evil lurks amongst us waiting to harm this infinite joy that surrounds us.

Are we mad to disbeleive them and depend merely on our own thoughts and senses?

Which is illusion and which is real? And if it be illusion, then why and for what purpose reach such extremes, pay so much for so little results?

If the people be not convinced but the propaganda goes on endlessly, then to what end. What are they hiding?

ask yourself what really lies behind the curtain. If you cannot change what lies behind the curtain then at least protect yourself from what lies there, for other wise you are merely more meat for the machine.

there will never be an admission that we are in a depression that is growing worse, do not expect it. Do for yourself what you can, while you can.

The storm has not stopped, the flood is still rising, to high ground or die.

Sat, 03/15/2014 - 15:25 | 4552436 Pee Wee
Pee Wee's picture

Yeah, boomers --- and the weather!

Really, the truth is bailing out fraud masked as capitalism has cost 10M jobs.  

Let's hear it for the "dual" mandate!

Sat, 03/15/2014 - 15:09 | 4552428 kellycriterion
kellycriterion's picture

Seriously, what's the point of living if you can't have a Theory of Everything that applies to all people, in all situations, at all times. That doesn't require anything more from individuals than follow the leader. A factory model of smart and moral and safe.

We just have to hope and prey, that the unscrupulous don't get wind of this final solution.

Sun, 03/16/2014 - 08:58 | 4554454 mccvilb
mccvilb's picture

Hope and prey?

Sat, 03/15/2014 - 14:58 | 4552390 novictim
novictim's picture

"What is going on?", you ask? 

A: Capitalism is eating its own.  It starts by eating its toes and then forefoot and then munches its way further and further up the body of citizenry.  

The cycle of profit taking and layoffs, paycuts, outsourcing...cooking the Golden Goose(!)...will go on until a major artery is breached and the race to the bottom bottoms out.  Then collapse and revolution.

We can stop this crazy system and prevent the inevitable catastrophe if we redistribute wealth from the top back down into the bottom using the known tools of: Progressive Taxation, Confiscation, and Inflation.

We can fix this.

I guess the decisions to use these tools will really depend on how much we love our neighbors and their kids and want them to have a good life.  

Sun, 03/16/2014 - 08:21 | 4554402 CSA
CSA's picture

Down voted because your attempt at anti-cap humor was piss poor.

Sat, 03/15/2014 - 22:57 | 4553809 jaxville
jaxville's picture

Capitalism?!?!?  No such thing anymore. It has been dead for at least a full generation. Facism and cronyism have replaced it. Where have you been?

Sat, 03/15/2014 - 18:38 | 4553034 moneybots
moneybots's picture

"We can stop this crazy system and prevent the inevitable catastrophe if we redistribute wealth from the top back down into the bottom using the known tools of: Progressive Taxation, Confiscation, and Inflation."

 

Like France?  Like Venezuela?

Sat, 03/15/2014 - 14:40 | 4552343 simplejustice
simplejustice's picture

Life taught me that I could always find a job if I choose to do something that other people refused to do(think pumping septic tanks here.) I have worked since I was 15 years old (now 60) still working, no government help. I own my business, pay every tax I owe with the help of a good accountant and still am staying busy in current environment. I know if I fail its no-ones fault but mine and I will start over again. Now, I wonder what has happened to my country?

Sun, 03/16/2014 - 08:25 | 4554406 CSA
CSA's picture

How DARE you be optimistic in this cesspool (pun intended) of a pity party.

Sun, 03/16/2014 - 05:08 | 4554266 zionhead101
zionhead101's picture

There always has and always will be jobs for those to service those not willing, nor not inclined to slop in their own shit.

But that is not the point, the point is the USA is rapidly entering the point that most will not even have enough CASH to eat, let alone heat the house , rent the house, in the future when the toilet is blocked the guy will either get off his ass and fix it himself, or he will seal the door and make the family shit outside, like it used to be done.

 

Sun, 03/16/2014 - 04:57 | 4554257 newworldorder
newworldorder's picture

I envy your optimism and can - do Americanism. Not much of that left in this country. As many of us however, who have spent a lifetime of work inside the corporate structure, we do not share your individual optimism.  As a corporate worker, unless you have Affirmative Action Protections, you are as disposable as a soiled hankie at the whim of the corporation and global market forces. Market forces that your government for the protection and wealth benefit  of Corporatists has worked hard to implement. The playing field for workers is NOT LEVEL and has not been level since the late 1980's.

Think - NAFTA, Most favored nation trading status for China, Repeal of Financial/Banking  Regulations, Unlimited Spending on a 10 years war in the middle east, the Deficits dont matter mantra - that has given us an $18 trillion cumulative deficit and counting, millions of jobs that have been transferred out of the US never to come back, as well as other major measures that have killed jobs for Americans. We are also going to compound our problems by legalizing 15+ million illegals adding to our unemployment problems.

The collective insanity of the blue team / red team bickering is almost too much to bear if one HAS NOT DRUNK THE COOLAID.

Sun, 03/16/2014 - 15:11 | 4555728 simplejustice
simplejustice's picture

For myself,remembering that the here and now,is here now,keeps the focus local,where my actions have the most impact.

Sat, 03/15/2014 - 21:58 | 4553665 zionhead101
zionhead101's picture

Your country was looted, and pillaged, and stripped to the bone by the VAMPIRES (AIPAC), and everything that had value was shipped off to TEL-AVIV pre-1980's

All that remains of the USA is the FSA, and US-MIL fed with fake FIAT,

 

Ok, can you handle the truth?

Sun, 03/16/2014 - 03:40 | 4554163 Kprime
Kprime's picture

Of course he can handle the truth.  He pumps shit for a living.  Can't shit an old shitter.

Sat, 03/15/2014 - 19:09 | 4553140 Berspankme
Berspankme's picture

Could you please pump out boehner, reid, pelosi et al. They are overflowing with shit running out of their mouths

Sat, 03/15/2014 - 23:06 | 4553829 simplejustice
simplejustice's picture

Sorry,no can do.We would have to add too much capacity to handle the excessive volume, plus the extra charges by the E.P.A. for that kind of toxic shot would be a deal killer.

Sat, 03/15/2014 - 15:10 | 4552434 sgt_doom
sgt_doom's picture

Today, millions of unemployed Americans applied to septic tank companies.

Spokespersons for the companies said they were overwhelmed, and suggeste Americans look elsewhere.

Sat, 03/15/2014 - 15:58 | 4552560 simplejustice
simplejustice's picture

Smartass!

Sat, 03/15/2014 - 15:20 | 4552466 Shad_ow
Shad_ow's picture

Try looking to D.C.  Not many tanks there but plenty of pumping to be done.

Sun, 03/16/2014 - 03:32 | 4554154 DontGive
DontGive's picture

+100 - that had to be said.

Do NOT follow this link or you will be banned from the site!